Boeing landed an agreement with Qatar Airways for up to 100 jets, comprised of orders for 10 777s, 30 787s, and a signed letter of intent for up to 60 737s, with a combined total list price of $18.6 billion. This sale comes after Qatar Airways CEO, Akbar Al Baker, publicly criticized Airbus over its delays with the A320neo and A350 in June.
For the year through September 27th, Boeing has garnered 357 gross orders, a sharp decrease from 499 orders last year during the same time period. The slowdown in orders has caused the Company’s book to bill ratio to drop to 0.5 compared to 0.7 during the same period last year.
Safran, a French engine manufacturer, recently announced it has entered into exclusive talks with private equity firm Advent International Corp. about the sale of its Morpho identity and security business for $2.7 billion. Advent plans to combine Safran’s identity and security business with Oberthur Technologies, which was acquired by Advent back in 2011.
While the United Nations Assembly was meeting in New York, Airbus and Boeing announced that each company has received permission from the U.S. government to sell commercial aircraft to Iran. Boeing plans to sell 80 new aircraft and lease an additional 29 Boeing 737s to Iran for ~$25 billion. Airbus, on the other hand, only received approval from the U.S. Treasury on one of the two licenses it requested, allowing it to sell 17 aircraft to Iran for ~$1.8 billion, rather than the 112 aircraft requested.
The constant dynamic of Continuing Resolutions (“CR”) and looming budget sequestration over the last eight years hinders the U.S. military by shifting focus from modernization efforts to fulfilling current combat needs. Ironically, spending caps and budget requirements under CRs increase cost inefficiencies and waste for the Armed Forces.
According to Breaking Defense, Under Secretary of Defense for Acquisition, Frank Kendall, firmly believes Congress will be unable to implement a new defense funding bill before October 1st. With the Senate failing to pass the bill for the third time earlier this week, the real question has changed to whether the Continuing Resolution (“CR”) will last for three or six months.
This past week, Boeing announced that it will not raise commercial aircraft list prices for the first time in seven years. The Company typically raises prices annually (2.9% and 3.1% in 2015 and 2014, respectively) to account for increases in cost of materials, services, and labor.
The Department of Defense (“DoD”) announced Lockheed Martin has been awarded an indefinite delivery / indefinite quantity (“IDIQ”) contract with the U.S. Air Force for the production of the Super Hercules C-130J transport plane. The decade long contract covers production of an estimated 100 aircraft for domestic and foreign military sales through August 2026 and has a ceiling value of $10 billion.